(HSY) The Hershey Company Porters Five Forces Research

For The Hershey Company, supplier power is high because signature brands still depend on limited substitutes for high-quality cocoa, confectionery fats, and specialty ingredients. Hershey reported net sales of $11.2 billion in FY2024, so small input shocks can move a large cost base. Reformulation can protect supply, but it can also change taste, texture, and brand trust. That weakens Hershey’s price leverage with suppliers.

• Limited cocoa and specialty input substitutes
• Reformulation can hurt product quality
• $11.2 billion FY2024 sales amplify cost risk

The Hershey Company’s scale helps mute supplier pressure: 2024 net sales were about $11.2 billion, so its buying power is far above smaller candy makers. That volume lets Hershey qualify multiple suppliers, shift sourcing by region, and push harder on price and service terms.

Still, supplier power stays moderate because key inputs like cocoa remain tight. ICE cocoa prices hit record highs above $10,000 per metric ton in 2024, and weather and crop disease have kept West African supply under strain.

• Big volume improves bargaining leverage
• Multi-sourcing lowers single-vendor risk
• Cocoa scarcity keeps input power moderate

Promotional dependence keeps The Hershey Company’s customer power high: retailers often push for discounts, feature ads, seasonal displays, and trade allowances, which lowers net realized price and squeezes margins. In 2025, Hershey reported net sales of about $11.2 billion, but a large share still depends on shelf execution and promo spend, so buyers can shape value capture even behind strong brands. Hershey’s labels help defend price, but major chains still decide how much volume moves at the shelf.

• Discounts reduce net pricing
• Trade spend weakens margins
• Retailers control shelf visibility

Hershey’s broad channel mix—mass, club, grocery, convenience, drug, foodservice, and e-commerce—reduces dependence on any one buyer, and its scale helps it keep shelf space. In the latest reported year, Hershey generated about $11.2 billion in net sales, so major retailers still matter a lot. Still, strong brands like Reese’s and Hershey’s limit full buyer switching, so bargaining power stays moderate.

• Many channels spread buyer risk.
• Big retailers still pressure terms.
• Brand pull limits customer switching.

Snacking trends shift fast, so Hershey must keep launching new flavors, formats, and better-for-you items. In 2025, Hershey posted about $11.2 billion in net sales, and its salty snacks plus protein bars widen the fight beyond candy alone. That raises rivalry because rivals also keep spending to stay on shelf.

• New products drive constant spend
• Hershey competes beyond candy
• 2025 sales: about $11.2 billion

Seasonal demand makes rivalry at The Hershey Company especially sharp around Halloween, Valentine’s Day, Easter, and winter holidays, when candy volume can swing fast and brands fight for shelf space, promotions, and display wins. In confectionery, these windows can shape a big share of annual results, so rivals push price cuts and marketing hard, keeping competitive pressure structurally high all year.

• Peak holidays drive the fiercest price and display battles.
• Seasonal sales can sway full-year performance.
• Rivalry stays strong because timing matters as much as brand.

Non-food reward substitutes are a real threat for The Hershey Company because a $2 to $5 impulse buy can easily shift to a streaming month, a game add-on, coffee, or a small lifestyle treat. In 2025, U.S. consumers stayed price-sensitive, so value-focused spending often moved away from candy and toward other low-cost rewards.

• Same budget, different reward.
• Weakens when value pressure rises.
• Hits impulse and convenience buys.

Hershey faces a moderate substitute threat because better-for-you snacks can win when chocolate looks too sugary or indulgent. The company has moved into snacks and protein, but confectionery still holds on taste and convenience, which keeps switching risk from disappearing. If cleaner-label or functional snacks keep growing faster than candy, Hershey’s mix could face more pressure.

• Moderate threat, not low.

• Cleaner labels can pull demand away.

• Snacks and protein help, but only partly.

• Taste and convenience still support candy.

Food safety, labeling, and traceability rules raise the bar for any new entrant, and the FDA Food Traceability Rule adds tougher recordkeeping for high-risk foods by January 20, 2026. Cocoa also got far pricier, with futures topping $10,000 per metric ton in 2024-25, while dairy and packaging contracts stay tight. That lifts start-up costs and slows market entry.

• Compliance adds legal and systems costs.
• Cocoa supply is costly and volatile.
• Reliable dairy and packaging are hard to lock in.

Digital entry is easier than national entry, so small brands can test candy ideas through direct-to-consumer sites and online marketplaces without building a full sales force. But mass confectionery still needs shelf space, seasonal displays, and wide store coverage, which keeps the real barrier high.

For The Hershey Company, that means the threat of new entrants is low to moderate, not high. A startup can launch fast online, but it still has to win retail distribution, fund promotions, and reach shoppers at Halloween, Easter, and other peak periods.

• Easy to test online
• Hard to scale in retail
• Seasonal execution matters
• Threat stays low to moderate